Tuesday, May 27, 2008

With Finite Resources, Which Problems Should Government Tackle?

So asks the Copenhagen Consensus Conference. I was attracted to this article because the conference is the brainchild of Right On The Left Coast hero Bjorn Lomborg (type "lomborg" into the search engine at the top of this blog page to learn more about him).

The experts are considering detailed reports by prominent international researchers regarding ten challenges, including air pollution, armed conflicts, diseases, education, global warming, malnutrition and hunger, sanitation and access to clean water, subsidies and trade barriers, terrorism, and women and development. In each area, the researchers define the problem, suggest options for solving the problem[*], and assign a benefit-to-cost ratio (BCR) to each solution. The higher the BCR, the more cost-effective the solution is.

Prime Minister Rasmussen concretized the value of the CC08 exercise by referring to the earlier version in 2004. He noted that in 2004, CC04 participants put controlling the HIV/AIDS epidemic in developing countries at the top of the list. Consequently, the Danish government began to devote a higher proportion of its overseas development aid to combating that disease, doubling the aid from $100 to $200 million per year by 2010.

Rasmussen got ahead of the 2008 deliberations a bit when he turned to the subject of climate change. He argued that the case for action is strong, and that the world needed to cut its greenhouse gas emissions. To address the problem, Rasmussen called for "a new Green industrial revolution and a new Green world economy." Interestingly, the 2004 Copenhagen Consensus report ranked measures to address climate change at the very bottom, finding that proposals for carbon taxes and implementing the Kyoto Protocol would have costs that "were likely to exceed the benefits."